July 7, 2022

Hundreds of millions lost in California surgery scam

Doctors are generally assumed to be honest — but an investigation into massive insurance fraud in southern California shows that this is not always the case. Hundreds of people, many of them recent immigrants unfamiliar with the US health case system, were apparently paid to undergo routine procedures while medical centres pocketed the insurance cheques. According to the New York Times, the FBI estimates that insurers have probably lost US$500 million in this scam. (The National Health Care Anti-Fraud association calculates that 3 or 5 per cent of the US$1.7 trillion spent on American health care in 2003 was lost to fraud – at least $51 billion.)

Earlier this year Blue Cross and Blue Shield companies from several states filed a civil suit against nearly a dozen clinics. They say that these centres recruited people “from across the country to come to the clinics and undergo completely unnecessary diagnostic and surgical procedures, so that the clinics and surgeons could submit phoney insurance claims.” Some of the surgery was not only unnecessary but risky.

One couple interviewed by the Times, Julio Hernandez and Sandra Padilla, of Phoenix, visited a clinic in Anaheim several times and were paid about US$400 for each procedure. Then cheques arrived from insurers for tens of thousands of dollars. A lawyer from the clinic told them to hand over the cheques and threatened them with lawsuits, jail and deportation if they did not comply.